These seven funds, which have towered over their rivals for the past 15 years, PROVED THEIR METTLE in booms and busts, and everything in between.

By YUVAL ROSENBERG

December 26, 2005

(FORTUNE Magazine) – One thing you can count on is that the stock market almost never does what you expect it to. And while the outlook always seems uncertain, this is a
particularly dicey time, with questions about war and oil added to the usual clashing chorus of bullish and bearish indicators. If you'd prefer not to navigate these tricky waters
yourself, there are plenty of mutual fund managers who would be happy to do the steering for you. Below, we profile seven outstanding candidates.

We set out to find veteran managers who have excelled in a variety of market environments over a long period of time. But we also wanted managers who outperformed their peers, a sign
that they have succeeded not just because market conditions favored their style but because their investing discipline and stock-picking prowess helped them blow past the competition.
We started by asking Morningstar, the fund research firm, to screen for funds that have beaten their category averages by the widest margins over the past 15 years, a period that
includes an extreme boom, an extreme bust, and most everything in between. We pared down this list of long-term winners by excluding funds that are closed to new investors and those
narrowly focused on one sector. We also eliminated funds with high minimum investments or excessive expenses. Finally, we avoided any funds implicated in the scandals of recent years.

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The funds that passed our test include two large-cap portfolios and two mid-cap offerings as well as one small-cap specialist, a world fund, and a so-called moderate allocation fund
that combines stocks and bonds (we profile them in that order). You may recognize a number of the names here: Calamos, Dreman, Muhlenkamp. Others, such as Bruce, are more obscure. But
while timing played a part in determining which names rose to the top of our list, these funds share certain traits that helped them outshine their rivals. First, all the managers
you'll meet here are veteran performers. In fact, only William Frels of Mairs & Power Growth has a managerial tenure of fewer than ten years. (And as you'll see, Frels, 66, isn't
exactly a neophyte.) Second, no matter how Morningstar categorizes them, most of these funds allow their managers some leeway--the flexibility to think outside the style-box, as it
were, which allows them to pursue their best ideas aggressively and hold on to their winners. That freedom, in the hands of managers such as these, produces exceptional results.

MAIRS & POWER GROWTH (MPGFX)

In the Dakota Sioux language, Minnesota--or minisota--means "water that reflects the sky." But for Mairs & Power Growth, classified as a large-cap blend fund, Minnesota has meant
a land of opportunity. The $2.5 billion fund invests predominantly in companies based near its St. Paul headquarters. Rather than being a handicap, that upper Midwest bias has given
the fund a critical edge. "Our proximity to the managements of these companies, to the corporate headquarters, has been very significant in our success," says former manager George
Mairs III, who remains chairman of the fund firm. In fact, the fund has rocketed almost 17.5% a year over the past 15 years, besting its average rival by more than six percentage
points and topping the S&P 500 by nearly as much.

Current manager William Frels oversees a portfolio of just 39 names that blends local stars such as Target and Medtronic with some companies from outside the region, such as Johnson
& Johnson. Frels, who has built a standout record as manager of the Mairs & Power Balanced fund since 1992, co-managed the Growth fund for five years before taking the reins
in 2004. He looks for profitable companies with earnings that should grow at least 10% a year over the next three to five years. He's also happy to venture beyond blue-chip names,
using the firm's local expertise to find appealing mid-caps, which now account for more than a third of assets, and small caps, which represent some 10% of holdings. Those smaller
names bring plenty of pop to the portfolio. One current favorite is Valspar, a Minneapolis manufacturer of paints and industrial coatings. The company's margins, squeezed by higher
costs for petroleum-based raw materials, are rebounding and should get a further boost from cost-cutting plans. Once a company is added it's likely to stay for a long, long time;
turnover in recent years has been 3% or less. That lifts the fund's tax efficiency and helps keep its expense ratio to a low 0.71%.

SCUDDER-DREMAN HIGH RETURN (KDHAX)

David Dreman has been called the dean of contrarian investors, and one look at Scudder-Dreman High Return shows why. The roster of top stocks includes large positions in controversial
companies such as tobacco titan Altria and scandal-plagued insurer AIG. Among the financial hold- ings he's gambled on are troubled mortgage giants Fred- die Mac and Fannie Mae. Both
have been hammered by accounting problems and continued pressure from high-profile critics, including those at the White House and the Federal Reserve. Fannie Mae shares, in
particular, have taken a drubbing over the past year, sliding some 27%. But true to his contrarian style, Dreman has loaded up; Fannie Mae recently constituted 4% of the fund. Sure,
the political environment presents some risks, Dreman concedes. But with the stock trading for about seven times next year's earnings, as he figures it, he's enticed by the potential
value. "They could," he says, "have a lot of upside."

Dreman won't buy into just any unpopular business for his large-cap value fund. He targets companies that trade at low multiples of earnings, book value, or cash flow, and keeps an
eye out for high dividend yields as well. He isn't afraid to make bold sector calls, either, as he has recently with energy, health care, and financials.

Dreman's deep-value approach means the fund may lag the market at times, but it produces remarkable results over the long term. In 1999, for example, High Return lost 13% as the
S&P 500 was gaining 21%. In 2002 it lost 18.5%. Yet High Return has posted average annual gains of nearly 17% over the past decade and a half, which puts it about five percentage
points ahead of the S&P 500 and the average large value fund.

CALAMOS GROWTH (CVGRX)

The managers at Calamos know a thing or two about growth. Earlier this year the fund firm moved into new headquarters twice as large as its old offices, a move necessitated by the
company's mounting success and increased staff. Nowhere are those fast-rising fortunes better exemplified than at the Calamos Growth fund. The mid-cap growth portfolio has returned an
annualized 18.7% over the past 15 years--and about 21% a year over the past decade, better than double the S&P 500. It's not surprising, then,that the fund's assets have swelled,
but the magnitude of the upsurge is truly astonishing: from less than $30 million at the end of 1999 to more than $16 billion today.

Steering that growth is a family affair. Co-managers John Calamos Sr. and his nephew Nick Calamos have run the fund since its 1990 inception, and John Calamos Jr. joined them in 1994.
The trio use various sector-specific measures to ferret out businesses growing faster than their industry peers. But before they buy, they also factor in broader economic conditions
and scrutinize a company's financial structure the way a bond buyer would. The goal is to manage risk rigorously while searching for stocks that could jump 20% or more over three
years. "We probably spend more time on the credit side and the balance-sheet side than most growth fund managers," Nick Calamos says.

That doesn't prevent them from making aggressive bets. Lately the portfolio of more than 170 stocks has been laden with health-care and tech names. Winners such as Apple, Motorola,
and Google have bolstered returns, but one large holding that hasn't fared as well is eBay. The stock has fallen 25% from its 52-week high. Calamos, though, still likes the auction
giant's ability to generate cash and notes that its return on capital remains strong. "The stock," he says, "has a good 30% to 40% upside from here."

MUHLENKAMP (MUHLX)

Cushion has been key to Ron Muhlenkamp's success. Yes, cushion. As manager of this $3 billion fund, Muhlenkamp will load up companies of any market cap--from giants such as Citigroup
to small caps such as Meritage Homes--just as long as the stocks promise to deliver solid profitability and are selling at a reasonable valuation. To gauge those factors, Muhlenkamp
considers the broader economic climate and then focuses on a company's return on equity and its price/earnings ratio. If those numbers look right, Muhlenkamp believes he's got limited
downside; and avoiding big losses is a critical factor in building a great long-term record. "If we can get a P/E below the ROE," he says, "we think we've got a cushion that allows us
to be wrong every now and then and still not lose money."

And he hasn't been wrong very often. His mid-cap value portfolio, which now includes more than 70 names, has shot up better than 18% a year over the past decade and a half, topping
the S&P 500 by six percentage points a year. These days Muhlenkamp likes the cushion he sees in--oddly enough--a cement maker. Shares of Mexican company Cemex have rocketed more
than 80% over the past 12 months, helping Muhlenkamp's stake grow into his largest single holding, at nearly 4% of the fund. Yet the manager expects more upside ahead and notes that
rebuilding efforts along the Gulf Coast will likely require lots of Cemex product. "It has been and remains rather cheap," Muhlenkamp adds. Given the stock's ROE of 14 and a 2005 P/E
around ten, Cemex should have ample cushion.

T. ROWE PRICE NEW HORIZONS (PRNHX)

Unlike many small-cap fund managers, Jack Laporte lets little stocks blossom into big winners. At the T. Rowe Price New Horizons fund, Laporte hunts for companies with market
valuations of $2 billion or less and earnings growth of 15% or more. And once he unearths a powerful grower, he makes a point of sticking with it--even if it surges well beyond
small-cap territory. He says his willingness to ride stocks for all they're worth is responsible for his standout returns: "I believe really strongly that holding on to your winners
is what helps a growth fund outperform over time."

Take, for example, Apollo Group, the for-profit education business best known as the parent of the University of Phoenix. Laporte, who has managed New Horizons for 18 years, bought
into Apollo at its 1994 IPO. Shares have risen a hundredfold since, and Apollo's market size has ballooned to nearly $13 billion. Yet Laporte still believes in the stock enough to
leave it as his top position, at 3.4% of the portfolio. Apollo shares have struggled for some 18 months, but the company remains on course to grow net income at about 20% a year, and
the stock now trades at less than 25 times estimated 2006 earnings. At those levels, Laporte thinks he'll be rewarded for hanging on.

That kind of conviction has kept New Horizons' turnover ratio below 30% in recent years. By contrast, small- cap growth funds average a 121% turnover, according to Morningstar. And
the lower churn has lifted returns. Aided by the small-cap run-up of the past several years--Laporte warns that the rally is now in "extra innings"--New Horizons has gained 15.7%
annually since 1990, topping the return of the average small-cap growth fund by more than a third. Thanks in part to those returns, New Horizons, which holds 276 stocks, has grown to
$6.2 billion in assets. That's high for a small-cap fund. But T. Rowe has closed the fund for extended periods in the past when Laporte was having trouble finding enough good stocks
to buy--and that's not a problem he's having today.

OPPENHEIMER GLOBAL OPPORTUNITIES (OPGIX)

What's the big idea? That's the question Frank Jennings likes to ask when considering a potential investment for his Oppenheimer Global Opportunities fund. Jennings searches for
stocks that can benefit from breakthrough concepts and economic shifts. He also keeps an eye out for companies in the midst of restructurings and those with attractive valuations.
Ultimately, what he wants is an investment that can pay off bigtime--five- or tenfold over five or ten years.

The fund itself certainly meets that standard. Given Jennings's appetite for risk and his stomach for volatility, performance has been choppy at times. Over the past ten years,
though--the time Jennings has steered the fund--he has racked up annualized gains of 15%, the best record of any world stock fund and seven percentage points ahead of the category
average. (Over 15 years, the numbers are just as impressive: 13.3% a year, 4.4 percentage points ahead of the world stock category.) Along with Randall Dishmon, who joined as
co-manager in 2004, Jennings oversees an eclectic mix of stocks and bonds, large caps and small caps. They divide their portfolio fairly equally between U.S. and international stocks.
They're also willing to load up on individual companies; 12.3% of the fund's assets were in chipmaker AMD as of the end of October. Another 5.5% was in Nektar Therapeutics, a biotech
firm with a potential blockbuster in Exubera, an inhaled insulin that the company is developing with Pfizer and Sanofi-Aventis. Jennings calls it a binary bet--all or nothing. With
the drug on track for approval, though, Jennings thinks Exubera could change the way diabetics are treated. And that certainly qualifies as a big idea with a very big potential
payoff.

BRUCE (BRUFX)

The Chicago-based managers of this minuscule fund aren't looking for the limelight. In fact they're trying to avoid it. But beating the S&P 500 by 20 percentage points or more
each year from 2000 through 2004 has made that difficult, garnering Robert Bruce and his son Jeff a considerable amount of unwanted attention. Without any advertising or marketing,
total assets in the fund have zoomed from $3 million at the end of 2000 to $110 million today.

So much new cash can cramp a manager's style (much of Bruce's record was built when there was very little money in the fund), but we don't expect that to happen here. And part of that
style is making big bets. An early move into zero-coupon bonds led to big losses in 1998 and 1999, for instance, a period when most everyone else was making money. But that same play
paid off remarkably when the market tanked, and thanks to the fund's extraordinary run since 2000--including astounding gains of 67% in 2003 and 57% in 2004--Bruce tops its category
by a wider margin than any other fund on our list. The portfolio has trounced the average moderate allocation offering by 7.6 percentage points over the past 15 years, though Jeff
Bruce thinks his fund's Morningstar label is something of a misnomer. "There's nothing moderate about us," he says. "There's no allocation strategy."

He's not kidding. Rather than maintaining any specific asset mix, the father-and-son team have carte blanche to invest wherever they see potential gains. "We've got a U.S. Treasury
bond, we've got a gold stock, we've got high-yield bonds, micro-cap stocks," says Bruce. "We're in stuff that's nuts and bolts, and we're in stuff that's just a wing and a prayer of a
cure five years out."

The duo does however gravitate toward distressed securities, turnaround stories, and stocks that few on Wall Street follow, many of which are small or very small. Or as Jeff Bruce
describes the process: They dig "through the trash and see if there's something there that the market's missing." Bruce declined to talk about any of his specific holdings, but
recently the fund's largest position has been in Amerco, the parent company of U-Haul. Since the company emerged from bankruptcy in March 2004, it has seen its stock more than triple,
making it a prime example of Bruce's knack for finding treasure in the trash.